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Young women have unique financial needs. Their timelines and sets of milestones can often differ from those of young men. And women still earn an average of 20 to 25 percent less than men for the same job. That’s why it is crucial for women just starting out in their careers to pay special attention to their finances.

First and foremost, young women should understand that personal finance is a priority. Like all the other commitments a young woman makes as she builds a life for herself, a woman should dedicate time and energy to understanding, safeguarding, and growing her personal wealth.

Female executives typically stress the importance of financial education and being comfortable with financial terms and processes. There are myriad applications and websites that can help to create a good foundation by teaching the terminology of finance. Financial literacy helps individuals use money more efficiently and make informed decisions.

Once the basic concepts are familiar, a next step can be to gain an understanding of fundamental strategies for building wealth.

For young women just starting out in their careers, one particularly important element is budgeting. A first income can be intoxicating, and there is a great temptation to spend, especially if few responsibilities exist. But add the realities of rent and transportation, food, utilities, and paying off student loans — and suddenly the need to budget becomes a necessity.

Once again, technology to the rescue: there are free budgeting apps and websites which calculate and track spending and help to map out a plan for expenses. According to some professionals, these apps can help to change behavior, making excessive daily expenditures a thing of the past.

A budget means looking beyond immediate purchases to the future: What does life hold in store in five, 10, or 20 years? A budget should include not just the amount a person spends in a given month, but how much she saves and how much she invests. Many financial advisors recommend that young women keep up to a year of living expenses on hand in cash.

And as early as possible, a woman should get into the habit of investing a comfortable amount each and every month. She should start with a small amount, perhaps $25 — small enough that she doesn’t feel it missing. Choose an amount that can be maintained and raised in small increments, rather than an amount that is too large and must eventually be reduced.

First steps in investing might include “maxing out” an employer 401(K), and starting a Roth IRA. Investing small amounts at first and making the investments easy to understand is key. Investments that involve compound interest should be considered. Whether her money is earned, saved or inherited, every woman should understand how her money is invested.

Preparing for life’s milestones is another critical element of financial planning. Young people should not necessarily count on a life partner who can help financially. Working towards a home, putting a child through college and retirement might all be within the scope of milestones to plan for.

All of these considerations are especially critical for young women living in Manhattan, as New York State and New York City residents are amongst the highest taxed in the country. This makes investing early a priority, particularly in tax-deferred accounts like a 401(K) that much more impactful on long-term financial success. If a New York City resident invests a dollar in a 401(K) instead of taking the funds and investing post-tax dollars, they are investing much more over the long run.

There also is the very high cost of living adjustment associated with living in Manhattan. Obviously, this city is much more expensive than many others; for women living here long term, investing early in tax-efficient instruments is imperative.

Young women may face the potential financial impact of having children. At what point in a career might she decide to exit the workforce to have a baby? More and more women are deferring motherhood to their thirties and even forties. What are the implications on earnings? On contributions to retirement plans or social security earnings? Fewer years in the workforce means less compound growth.

And an extended absence to look after children might require a woman to re-train before re-entering her profession.

For young families with children, one consideration might be a NY 529 college savings plan, which allows for a deduction of a portion of the investment in New York tax.

In the process of beginning to invest, trusted advice is essential, whether it comes from a professional, a parent, or even a knowledgeable friend. Putting together a team for support in finances — one that might include a tax attorney and an accountant — is a wise decision. Understanding concepts and strategizing with a team can help create the best possible financial roadmap for the future.

Suzanne M. Akian, CFP ® is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley in New York, NY. She can be reached at 212-613-6773 or at fa.morganstanleyindividual.com/akianzalanskas/.

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